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Puerto Rico will no longer adopt a value-added tax, after lawmakers in the Senate voted to overthrow an attempt by Puerto Rico's Governor, Alejandro Garcia Padilla, to veto previously passed repeal legislation. Puerto Rico was due to introduce value-added tax in place of sales and use tax (SUT) from June 1. Puerto Rico's Senate on May 5, 2016, unanimously backed legislation earlier supported by the lower house of Parliament on May 2 to prevent value-added tax from being introduced. The Governor thereafter vetoed the legislation. However, lawmakers needed to only muster two-thirds support to override this veto. On May 26, 2016, the Senate voted to abandon the VAT plans by 21 votes to 1. - by Mike Godfrey, Tax-News.com, Washington Puerto Rico's VAT Plans Blocked By Lawmakers

Two Louisiana Republican congressmen are playing key roles — on opposite sides — in legislation aimed at addressing the looming $70 billion default by the U.S. territory of Puerto Rico. HR5278, on which the U.S. House of Representatives is expected to vote as early as Wednesday, essentially would establish an oversight board to help Puerto Rico manage its public finances. In the House Committee on Natural Resources last week U.S. Rep. Garret Graves, of Baton Rouge, was able to attach three amendments to the bill and voted with 29 committee members in favor of recommending the full House approve the measure called the “Puerto Rico Oversight, Management, and Economic Stability Act” or “PROMESA.” Rep. John Fleming, of Minden, on the other hand, has been critical of the legislation and pushed eight changes to the measure, all of which were either voted down (Graves voted against many) or sidetracked on procedural grounds. Fleming was among the 10 representatives on the panel who voted a...

Puerto Rico would lose much of its sovereignty under financial restructuring legislation passed out of the House Natural Resources Committee. Unfortunately, the bitter pill is unavoidable. With the U.S. territory increasingly unable to pay its bills — and little more than a month away from defaulting on a $2 billion bond payment — the bipartisan bill would create a long-term process for restoring fiscal stability. Washington must act because Puerto Rico was inexplicably denied the power to declare bankruptcy in the way that American cities, such as Detroit, have. Backed by President Obama, the legislation creates a bankruptcy-like process for relieving Puerto Rico of obligations, with rules specifying that bondholders and a pension system with $46 billion in unfunded liabilities would be treated equally. Another major provision would give a seven-member board much governing authority, including powers to force balanced budgets, sell off government assets, oversee negotiations with ...

Puerto Rico's governor has lost a battle to increase a business-to-business tax and impose a transition to a value-added tax system amid an economic crisis. Senators on Thursday gathered enough votes to approve a bill previously vetoed by Gov. Alejandro Garcia Padilla, who warned their actions would push the U.S. territory into deeper financial trouble. The bill prevents an increase of the business-to-business tax from 4 percent to 10.5 percent from going into effect next week. Garcia said that legislators who overrode his veto acted irresponsibly and that they did not identify any new sources of badly needed revenue. Puerto Rico is floundering amid 10 years of economic stagnation and faces a $70 billion public debt load that Garcia has said is unpayable and needs restructuring. Puerto Rico Senators Override Veto, Halt Tax Increase

Pssst. Don’t tell   Ted Cruz   or the media, but the Republican Congress is using conservative principles to solve an urgent problem caused by progressive government. With some fortitude and a little luck, the Commonwealth of Puerto Rico might even be able to grow again. House Republicans this week plan to mark up a revised bill to let Puerto Rico restructure its $72 billion debt under the supervision of a federal oversight board. Puerto Rico needs Congress’s help to prevent a creditor brawl when the island’s debt issuers inevitably default, as well as to arrest a decades-long recession and population exodus. The urgency of the problem gave Republicans political leverage with the   Obama   Administration, and Speaker   Paul Ryan   has used it. The bill offers debt relief to Puerto Rico in return for a mechanism to overrule the territory’s feckless current government and impose reform. The legislation explicitly pre-empts conflicting laws and regulations pas...

After months of negotiation, Republicans and Democrats in Congress have agreed on a plan to help Puerto Rico deal with its crushing $70 billion debt. It sets up a control board to investigate the U.S. territory's murky financial picture and restructure its debt payments to creditors. ARI SHAPIRO, HOST: After months of discussion, Congress and the White House have agreed on a deal to help Puerto Rico repay its debt - more than $70 billion of it. The plan sets up a control board that will restructure debt payments and oversee the island's finances. NPR's Greg Allen reports. GREG ALLEN, BYLINE: It's been nearly a year since Puerto Rico's Governor Alejandro Garcia Padilla sent shockwaves through Washington and Wall Street by announcing the U.S. territory was unable to pay its debts. Since the beginning of the year, House Speaker Paul Ryan promised Congress would act to help Puerto Rico, but as a bill was being developed, House members, especially Republicans, faced c...

After weeks of delays, House Republicans are moving forward with legislation to help Puerto Rico manage $70 billion in debt. A revised bill introduced late Wednesday would create a control board to help manage the U.S. territory’s financial obligations and oversee some debt restructuring. Though it is the third version of the legislation, those objectives remain unchanged. House Natural Resources Committee Chairman Rob Bishop, R-Utah, has led negotiations on the bill and has worked closely with House Speaker Paul Ryan, R-Wisc., congressional Democrats and the White House. The aim has been to write legislation that could pass both the House and the Senate before Puerto Rico defaults on a $2 billion debt payment due July 1. The committee could vote on the bill as soon as next week. Bishop originally introduced a bill last month, but canceled a scheduled committee vote after objections from both parties. Since then, he has worked closely with Ryan to win over conservatives who worry it...

As the U.S. Congress drags its feet on a bill to address Puerto Rico's $70 billion debt crisis, it could get kicked into high gear by an unlikely source: the Supreme Court. The highest U.S. court is due to rule by the end of June on the validity of a Puerto Rico law that would allow the U.S. territory to restructure the chunk of its debt issued by public agencies, more than $20 billion, in a bankruptcy-like process. The court fight is playing out as the Republican-led Congress grapples with legislation that lawmakers hope will prevent the need for a bailout of the territory of 3.5 million U.S. citizens. The legislation is expected to put Puerto Rico's finances under federal oversight through a control board and let the Caribbean island cut debt through a bankruptcy-like restructuring process. It would preempt the Recovery Act, the local restructuring law that was thrown out in U.S. courts before Puerto Rico asked the Supreme Court to reinstate it. Puerto Rico is not c...

As Congress resumes work to craft a rescue package for Puerto Rico, one must be struck by the absence of any serious attempt to extricate the island from its 10- year economic slump. This is all the more disappointing since, without resumed economic growth, there is no prospect that a long-term solution will have been found for Puerto Rico’s debt crisis. House Speaker Paul Ryan’s efforts to forge a bipartisan consensus on a rescue bill for Puerto Rico centers on two main planks. The first is to provide the island with some sort of bankruptcy mechanism that might allow it to restructure its US$72 billion debt mountain in an orderly manner. Such a mechanism might include an 11-month stay on Puerto Rico’s debt service payments that would give the island time to restructure its debt. Puerto Rico’s Governor Alejandro Garcia Padilla and U.S. Treasury Secretary Jack Lew in San Juan, Puerto Rico, May 9, 2016. REUTERS/Alvin Baez. The second is some sort of fiscal control board for the isl...

Puerto Rico's debt crisis, if left unaddressed by the U.S. Congress where legislation has stalled in the House Natural Resources Committee, will result in the need to pay for a humanitarian aid package, Congressman Raul Grijalva said on Thursday. Grijalva, the ranking Democrat on the HNRC from Arizona, said in a teleconference with reporters that it is an "either/or" situation as Puerto Rico faces $70 billion in debt it cannot pay off and a growing humanitarian crisis because it cannot afford maintaining basic social services. "Either we begin this process, stabilize, create some carve out opportunities for essential services and/or wait for the crisis to get worse and then have to respond with humanitarian relief," Grijalva said, adding that a new draft of the bill had not been made available as of Thursday morning. Grijalva visited Puerto Rico this week and met with the island's leadership and toured its main medical facilities. He said austerity alone is ...

Republicans have delayed the release of much-anticipated legislation they've been working on to deal with Puerto Rico's debt crisis, but a Republican aide says it could be introduced Thursday. The expectation was that the bill dealing with Puerto Rico's at least $72 billion debt would be unveiled Wednesday by Republican Rep. Rob Bishop, a Utah Republican who is chairman of the House Natural Resources Committee. The committee has been negotiating the bill, hoping for bipartisan support, with several groups representing debt holders, Puerto Rico, the federal government and more. A committee aide to Bishop said "we are still working through technical stuff, minor refinements." The committee's ranking member Raúl M. Grijalva, D-Ariz., was in Puerto Rico Wednesday to get an in-person view of how the island's fiscal crisis has been affecting it and its people. "We are making progress, but we are not there yet," Grijalva said about the legislation. ...

Congressional Democrats circled their wagons on Tuesday, a day before Republicans unveil an updated Puerto Rico debt bill, by focusing attention on the island's humanitarian crisis while hinting at an unwanted bailout if the legislation fails to pass. The bill stalled before it could even reach a vote in the House Natural Resource Committee (HNRC) last month. Leading up to the latest draft, Democrats are voicing complaints and highlighting the island's growing humanitarian crisis in a potential nod toward future bailout efforts. The island faces $70 billion in total debt, as well as economy-killing emigration and a staggering 45 percent poverty rate. To be sure, Democrats say they have not seen the latest draft of the bill. Raul Grijalva, the Democratic leader of the HNRC, told Reuters during a visit to Puerto Rico on Tuesday the bill must protect Puerto Rico's pension holders "the same as everyone else," and avoid lowering the minimum wage. "You're ...

U.S. Republican presidential candidate Donald Trump said on Wednesday he would not bail out Puerto Rico if he were in the White House. Asked in an interview with CNN what he would do to help the U.S. commonwealth, Trump said "No, I would not bail out Puerto Rico," saying it had too much debt. Puerto Rico's Government Development Bank on Monday defaulted on a $422 million debt payment. The government faces $70 billion in debt overall, a 45-percent poverty rate and a shrinking population. It owes another $1.9 billion on July 1 that Governor Alejandro Garcia Padilla says it cannot pay. (Reporting by Eric Walsh; Editing by Sandra Maler) 05/04/2016 18:12 © Copyright Reuters Ltd. All rights reserved. The information contained in this news report may not be published, broadcast or otherwise distributed without the prior written authority of Reuters Ltd. Trump says he wouldn't bail out Puerto Rico

  Paul Ryan Paul Ryan Sessions: Ryan made ‘big mistake’ not backing Trump Ryan fans GOP civil war over Donald Trump Third-party push gaining steam MORE (R-Wis.) is on the cusp of redefining the House Speakership, a position that he initially did not even want. The gavel associated with being two heartbeats from the presidency is traditionally bestowed upon a senior House member as the capstone of his career and he typically wields it with the primary aim of preserving his power. Ryan, however, has a long career left ahead of him and is already preparing to spend his full cache of political power to work himself out of the job as expeditiously as possible. Ryan initially has been a cautious Speaker. He has devolved power from the party's leadership back to the chamber's committee chairmen. He has eschewed forcing resolution where compromise has been elusive, even with Congress's most fundamental duty of developing a budget. Fully cognizant of the intra-party stalemates th...

Gov. Alejandro García Padilla of Puerto Rico said Sunday that he had ordered a debt moratorium, blocking a $422 million payment due on Monday. The missed payment is the biggest yet in a continuing series of defaults by the struggling United States territory, and a warning that Puerto Rico will probably default on even larger and more consequential payments due on July 1, unless Congress enacts rescue legislation before then. On that date nearly $2 billion is due, roughly $800 million of which consists of general-obligation bonds that carry an explicit guarantee by the Puerto Rican Constitution. Missing a major payment on such debt would not only set off a wave of creditor lawsuits, but it could also cast a shadow over America’s $3.7 trillion municipal bond market, for decades an essential source of financing for public works. “This was a painful decision,” the governor said in a televised speech on Sunday, in which he struck a nationalistic tone and said he had to invoke his emergency...